Digby Company manufactured and sold 37,000 units of its product at a price of $93 per unit. Total variable cost per unit is $60, consisting of $58 in variable production cost and $2 in variable selling and administrative cost. Fixed costs of manufacturing are $350,000.a. Compute the manufacturing margin for the company under variable costing.b. Compute the contribution margin based on this data.c. Compute the gross margin under absorption costing.
What will be an ideal response?
a. ($93 - $58) × 37,000 units = $1,295,000
b. ($93 - $60)(37,000 units) = $1,221,000
c. ($93 - $58)(37,000 units) - $350,000 = $945,000
You might also like to view...
Definitions of communication vary based upon an indication of success or accuracy. Which difference in definitions is the focus of this description?
A. level of observation B. intentionality C. denotative D. normative judgment
Which of the following acts requires that Web site operators obtain parental consent before collecting personal information about children under the age of 13?
A) Safe Children's Act of 2001 B) Children's Online Privacy Protection Act C) Children's Online Protection Act D) Adam Walsh Child Protection and Safety Act E) Children's Act for Responsible Employment
The CEO, president, and top executive officers are responsible for ________ in the strategic plan
A) operational planning B) developing the details of the pricing strategy C) designing ad campaigns D) defining the firm's purpose E) employee benefits
Perceived value and signaling value are often an important part of a successful differentiation strategy because
A. differentiation is all about selling products to sophisticated buyers. B. there are no other ways to differentiate a product. C. buyers seldom will pay for value they don't perceive, no matter how real the value of the differentiating extras may be. D. buyer satisfaction cannot be achieved until a product's value is promoted through clever ads. E. of the standardization of buyer needs and preferences.